Shakey’s president Vicente Gregorio
The country’s leading pizza parlor chain operator Shakey’s Pizza Asia Ventures Inc. (SPAVI) grew its recurring net profit by 15 percent year-on-year to P519 million in the first nine months on higher sales unlocked from its expanding network of restaurants.
System wide sales of SPAVI- which trades on the Philippine Stock Exchange under the ticker “PIZZA” – rose by 15 percent to P6 billion, driven by same-store sales growth of 6 percent and an expanding local store network.
Since the start of the year, SPAVI added 16 new outlets, ending September with a Philippine store network of 200. It expects to end the year with 207 stores in the Philippines, ahead of its earlier target of 204.
Net revenues for the nine-month period grew by 18 percent year-on-year to P5 billion.
For the third quarter alone, SPAVI’s revenues grew by 11 percent to P1.6 billion.
“We encountered a more competitive environment in the third quarter, which is also typically the second half’s leaner period. We are confident however that with the various product and marketing initiatives implemented, we will see another round of good sales growth as we enter the Christmas season – historically the strongest part of the year,” said Vicente Gregorio, SPAVI president and chief executive officer.
Operating profit and cash flow margins expanded by 210 basis points and 120 bps, respectively, versus the same period last year. These were attributed to synergies implemented after the entry of the Century Pacific Group as the new controlling shareholder, alongside price increases and cost-effiicency measures executed in anticipation of higher input costs.
As a result, operating income and cash flow adjusted for nonrecurring items grew by 36 percent and 26 percent, respectively, with their corresponding margins at 16.4 percent and 19.4 percent during the nine-month period.
“For the last quarter, we expect seasonally strong revenues to translate to better profitability metrics as we spread costs over a much larger base. We will also continue our efforts to monitor expenses closely as we start to feel the impact of higher raw material price and a weaker peso on our gross margin,” said Gregorio.
“Nevertheless, we remain on track towards hitting our full year targets and now look forward to a good start for 2018,” he added.
Apart from the Philippines, SPAVI also owns the perpetual rights to the Shakey’s brand for the Middle East, most of Asia, China, Australia, and Oceania.
SPAVI recently opened its first international store in Kuwait as part of a development agreement for the construction of at least 10 Shakey’s outlets in the region within a span of seven years. It also recently signed another area development agreement to build at least 10 Shakey’s Pizza outlets in the United Arab Emirates (UAE) over a span of five years. The first store, to be located in Dubai, is scheduled for opening in the first half of 2018.